Agrana reports fruit-based growth in annual results

By Jess Halliday

- Last updated on GMT

Related tags Sugar Profit European union

Agrana has reported its first set of annual results in which its
fruit segment outstripped sugar and starch as a source of revenue,
following a refocus in the wake of EU sugar reform.

The Austrian company has reported an increase in revenues of 28 per cent to €1.96bn for the year ended February 28, and an 8 per cent rise in operating profit to €107m. For the time, the fruit segment represented the leading source of sales, with 48 per cent of total revenues, compared to 41 per cent for sugar and 11 per cent for starch. Likewise, fruit came out on top in operating profit, making up 42 per cent of the total (sugar and starch made up 31 per cent and 27 per cent respectively). The results are a strong indication that companies formerly built around sugar should draw on other strengths, so as to remain profitable despite EU sugar reform. The reform began to be implemented last year, with the aim of reducing the amount of sugar on the market, to make the industry more competitive. "The realignment of AGRANA from a Central European sugar and starch company to a growth-oriented global player with strong positions in three product segments - SUGAR, STARCH and FRUIT - has been achieved successfully within the course of just a few years,"​ said CEO Johann Marihart. "The positive development of results also demonstrates that AGRANA recognised the difficulties posed by the EU's new sugar market regime in good time and that our policy of diversification has effectively countered these threats." ​Although revenues in the sugar segment increased by 4 per cent to €804m, with Eastern Europe being a major prop, profits declined from €38.7m last year to €32.9. "A temporary reduction in quotas, the restrictive export policy pursued by the EU Commission, higher energy costs and the first-ever imposition of a restructuring levy were responsible for the decline in profits,"​ said the company. ​A major factor driving the segment's rising sales was consolidation of its acquisitions DSF and Atys group into its operations.​In 2006 Agrane restructured its fruit segment so that all subsidiaries are now marketed under the global Agrana brand. The company has said that this allows for synergies in raw material purchasing, administration, R&D and sales. But another positive influence was the adjustment of the reporting period of some of the fruit subsidiaries, so that they fall in line with that of the parent.

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